Petrobras to sell RLAM refinery to Mubadala, postpones REPAR sale

MOSCOW (MRC) -- Brazil’s state-controlled oil company Petroleo Brasileiro SA said it had agreed to sell its RLAM refinery to Abu Dhabi’s Mubadala Capital for USD1.65 billion, subject to regulatory approval, reported Reuters.

Petrobras, as the company is known, also said it would not sell its REPAR refinery, in the southern state of Parana, at the current time as it considered the bids too low. It did not elaborate further but said, without giving a timeline, that it will begin a new sales process for REPAR.

Reuters reported earlier that both Ultrapar Participacoes SA and Raizen, a joint venture between Royal Dutch Shell PLC and Brazilian ethanol producer Cosan SA, had bid for REPAR.

According to antitrust rules, as Petrobras picked Ultrapar to lead negotiations for the sale of its REFAP refinery in Rio Grande do Sul state, in the same region as REPAR, its only option would be to sell REPAR to another competitor, in this case Raizen.

Petrobras said the process to divest REFAP, as well as five other refineries, namely RMAN, RNEST, REGAP, LUBNOR and SIX, was ongoing.

As MRC informed before, Brazil’s state-run oil company Petrobras is seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company's recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company's stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020).

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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MOSCOW (MRC) -- State-owned oil supplier CPC Corporation is aiming to start its residual fluid catalytic cracker (FCC) in Taiwan on February 8, reported S&P Global.

The steam cracker has the capacity to produce 450,000 mt/year of propylene.

It was shut on January 19, 2021, due to technical issues.

As MRC wrote before, in January, 2021, CPC Corp bought a piece of land in Kaohsiung on which it plans to build a new naphtha cracker to replace its No. 4 cracker at a cost of NTD82.3 billion (USD2.94 billion). CPC's No. 4 cracker in Kaohsiung's Linyuan District has been in operation for 37 years and has an annual ethylene production capacity of 380,000 metric tons, which cannot meet the demand of its customers, CPC spokesman Chang Ray-chung said.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, exluding producers' inventories as of 1 January, 2020).

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
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1. Linde sees 2021 double-digit earnings growth after Q4 beat

MOSCOW (MRC) -- U.S.-German industrial gas producer Linde beat expectations with fourth quarter earnings and said it was targeting a 11-13% rise in adjusted earnings per share in 2021 irrespective of economic conditions, said the company. The supplier of gases such as oxygen, nitrogen and hydrogen to factories and hospitals said its fourth-quarter adjusted earnings per share were USD2.30, above the USD2.14 expected on average by analysts according to a Refinitiv poll. Linde also reported a 12% rise in adjusted EPS for 2020, citing price increases and productivity gains, and forecast first-quarter EPS growth of 16% to 19%. “I have confidence in our ability to grow EPS double-digit percent irrespective of the macro environment while also leveraging any economic recovery,” Chief Executive Steve Angel said in statement.




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MOSCOW (MRC) -- Crude oil futures surged during mid-morning trade in Asia Feb. 8, as strong demand from China continued to lift sentiment, while stimulus expectations provided some tailwind to the market, reported S&P Global.

At 10:50 am Singapore time (0250 GMT), the ICE Brent April contract was up 53 cents/b (0.89%) from the Feb. 5 settle to 59.87/b, while the March NYMEX light sweet crude contract was up 55 cents/b (0.97%) to USD57.40/b. Both markers had risen 5.31% and 6.16% in the week ended Feb. 5 to settle at one-year highs of USD59.34/b, and $56.85/b, respectively.

Fears that Chinese oil demand would take a hit following fresh outbreaks of the coronavirus were quelled after infection numbers subsided, and as the number of oil vessels heading towards the country remained high.

"Crude oil rose to its highest level in a year on signs of strong demand in China. The number of vessels sailing toward China hit a six-month high of 127 on Friday, equivalent to approximately 250 million barrels," ANZ analysts said in a Feb. 8 note. "This comes as stockpiles in China continue to fall."

The oil market also received a boost from hopes that a sizeable US stimulus package is not far-off, after the Senate, on Feb. 5, approved a fast-track budget measure that could allow the package to be passed despite Republican resistance. The House of Representatives later in the day also gave its approval to the measure.

"Oil is trading higher at the Asia open (after) getting a kick start from the US stimulus effect and a slightly weaker dollar," Stephen Innes, chief global market strategist at Axi, said in a Feb. 8 note.

Analysts also said that a decline in coronavirus infections in key economies such as the US and the UK amid rapid vaccine roll-outs have brightened the demand outlook for oil, stoking bullish sentiment especially since supply is expected to remain tight following Saudi Arabia's 1 million b/d output cut.

"With vaccines rolling out faster than energy markets predicted, oil traders feel comfortable adding length at current prices, even more so with [Chinese] demand holding up despite higher physical market prices," Innes said.

Nevertheless, concerns on the pandemic front continue to fester, as some countries, including Germany, are likely to extend their lockdowns till at least the end of February.

News reports that the Oxford-Astrazeneca is ineffective in preventing mild to moderate COVID-19 caused by the South African strain of the coronavirus have cause some consternation in the market as well.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, exluding producers' inventories as of 1 January, 2020).
MRC

MOSCOW (MRC) -- Hexion Inc. has announced that it is restarting operations at its Montenegro, Brazil manufacturing site to reflect improving market conditions and customer demand for wood adhesives in the region, according BusinessWire.

“Following extensive retraining for our associates and taking all the appropriate steps to ensure the safe operations of the site, we are pleased to restart production,” said Craig Rogerson, Chairman, President and Chief Executive Officer. “We have a long track record of serving the Brazilian market and the Montenegro site is a key part of our ongoing strategy to serve our valued Latin America customers. The restart of the Montenegro site was possible due to the commitment of its associates, increasing market demand and the joint efforts of all stakeholders in region of Montenegro, Rio Grande do Sul.”

Hexion opened the Montenegro site in 2010 to serve the engineered wood products market in southern Brazil. The site had been temporarily idled since May 2020. Hexion will also continue to operate normally and maintain commercial activity at the Company’s plants in Curitiba Parana and Tacuarembo, Uruguay. The Company expects a smooth and coordinated transition for its customers that will be supplied out of the Montenegro site in accordance with contractual and legal obligations.

The Montenegro plant is strategically located to serve large customer plants in the region that use urea formaldehyde (UF) resin in the production of engineered wood panels such as particleboard, interior-grade plywood and medium density fiberboard. These engineered wood materials in turn are used in various applications including the production of furniture, cabinetry and other wood products.

The facility includes state of the art environmental and safety protection, with recycling and reuse of waste streams, strict environmental control and monitoring systems. The plant complex is located on 42 acres of land, including a 3.7 acre preserve of native trees. When the site originally opened, Hexion participated in a reforestation project that planted more than 2,000 native trees on the property, and an additional 400 native trees in the region. In addition, the company has continued to periodically support environmental education programs in the area.

Based in Columbus, Ohio, Hexion Inc. is a global leader in thermoset resins. Hexion Inc. serves the global adhesive, coatings, composites and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries.

As MRC reported before, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), shut down its BPA plant in the Netherlands for scheduled maintenance in early November, 2020. The turnaround at this plant with a capacity of 120,000 mtyear of BPA, located in Pernis, the Netherlands, lasted until the end of November, 2020.

Bisphenol A is used as a hardener in the production of plastics, as well as plastic-based products. It is one of the key monomers in the production of epoxy resins and polycarbonate (PC).

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) rose in the first three quarters of 2020 by 32% year on year to 75,600 tonnes (57,200 tonnes a year earlier).

Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.
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